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This paper examines the diffusion of information around the initial public offering (IPO) process and identifies transaction partners on which IPO firms are dependent. Using a resource payments perspective, we argue that this dependence will lead to greater cumulative abnormal stock returns for transaction partners when this information is revealed in the market (when the initial form S-1 is filed with the SEC). Moreover, we examine the uniqueness of the resource configuration between the IPO firm and transaction partners and find that greater uniqueness is associated with higher valuation for these transaction partners.We also find that multiple dependencies (by the IPO firm) reduce the valuation effect for transaction partners, indicating that a bargaining effect reduces the potential value that any transaction partner can appropriate.

Purpose This study explores the role of the top management team (TMT) in determining whether IPO firms in high-tech industry will engage in acquisitions during the post-IPO period Design/methodology/approach We collect IPO and TMT data from firm prospectuses, and acquisition and financial data from SDC Platinum and Compustat, respectively. Poisson regression analysis is applied to test the effect of TMT characteristics on acquisition activity. Findings Using 135 IPO firms, we find evidence that TMT composition directly influences acquisition activity of IPO firms during the post-IPO period. Specifically, we find that TMT experience serving as members other firms’ boards and TMT experience in senior level management positions are both positively associated with acquisition activity. TMTs with prior IPO experience and TMTs with longer organizational tenures are negatively associated with acquisition activity. Originality/value This study is among the first to examine the impact of TMT demography on newly public firms’ acquisition activity. In doing so, it adds meaningfully to our understanding of the factors driving such firms’ strategic behavior.

Purpose – The slack-innovation relationship has interested scholars for years. The authors aim to delve into the impact of financial slack on firm innovation by replicating a classic study arguing that this relationship has an inverse U-shape. Design/methodology/approach – The sample consists of all US firms that were publicly traded between 1993 and 2011. The authors employ the standard econometrics methodology of panel regression with firm-fixed effect and time-fixed effect to estimate the regression equation of firm innovation on financial slack. Findings – The authors find that the relationship between financial slack and R&D investments is similar to that suggested by earlier authors, thus enhancing the generalizability of this important finding in management research. The authors also find that this relationship holds even during economic downturns. Originality/value – The authors replicate Nohria and Gulati's classic study by considering the impact of slack on innovation. The authors also move away from survey data, as used by Nohria and Gulati. The authors utilize actual firm-level data for a large sample of US publicly traded firms from 1993 to 2011, thus enhancing the generalizability of these findings.